[Congressional Record Volume 166, Number 217 (Sunday, December 20, 2020)]
[Senate]
[Pages S7860-S7862]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]



                              Coronavirus

  Mr. TOOMEY. Mr. President, earlier today, the minority leader came 
down to the Senate floor and unfortunately once again mischaracterized 
both the objectives and motives of Senate Republicans in the pursuit of 
the changes we wanted to make with respect to the CARES Act emergency 
lending program, and I want to address that. But let me just say 
candidly that I understand his frustration. Republicans together set 
out four goals for the country with respect to these programs, and we 
achieved all four goals. I guess that is a little bit frustrating.
  Let me go through just a little bit of recent history on this. Let's 
remember that this debate has been going on for several months. The 
Democrats' original position was to keep these programs in place. In 
fact, many of them wanted to expand them. They certainly wanted to 
extend them well past the end of the year. How do we know that? Well, 
among other ways, Senator Schumer himself sent a letter to Secretary 
Mnuchin and Chairman Powell asking exactly that--that they extend these 
programs.
  You might wonder, why would they want to extend an emergency lending 
facility when we are clearly not in an emergency in terms of the 
financial markets? The reason is that a lot of Democrats had other 
purposes in mind for these programs, and in my view, those other 
purposes would have constituted a terrible misuse of those programs.
  One of the goals clearly was to kind of morph the Fed's Municipal 
Liquidity Facility into a bailout fund for States

[[Page S7861]]

and municipalities. How do we know that? Well, because the Democrat-
controlled House passed a bill that would require that. There is no 
mystery here. They passed a bill that specifically would require the 
Fed to use the Municipal Liquidity Facility to bail out States and 
municipalities under outrageous terms: ultra-low interest rates, ultra-
long-term loans, 25 basis point interest rate, 10 years. States 
wouldn't even need to attest, as they do under current law, that they 
were unable to secure credit elsewhere.
  Basically, they wanted to turn the Fed from the lender of last resort 
to the lender of first resort. So they were clear about that. There are 
many Democratic activists and folks here who are sympathetic with them 
who have other purposes as well, such as using the Corporate Credit 
Facility as a way to coerce the behavior they want from corporations. 
It wasn't about extending credit to companies that need credit; it is 
about achieving a social or cultural or political objective by 
attaching terms to the loans that would result from that.
  Those are the kinds of uses that many on their side had. How do we 
know that? Well, among other things, they beat us up almost every day 
for not voting on the Heroes Act. I think they intended to vote for it, 
so they would have been voting for this very misuse.
  So our goal was simple. Our goal as a conference or the consensus of 
Republican Senators was to end these programs consistent with the 
intent of the law and, in fact, I believe, the letter of the law, 
prevent the misuse, and make sure the Fed's legitimate functions are 
not impinged upon. How are we going to do this? We are going to do this 
with four specific steps, four specific goals that would allow us to 
achieve that outcome for the American people.
  No. 1, sweep the unused money out of those accounts and repurpose it; 
use it for other, better purposes. We have other needs. That is an 
important objective. It also makes sure that the money is not available 
for misuse, if we are shifting it out of these facilities and putting 
it to good use.
  Now, again, initially the Democratic position was in opposition to 
this, but to their credit, the bipartisan group of eight folks who got 
together and really were the catalyst for the bill that we are working 
on now--the Republicans persuaded the Democrats to accept this idea 
that the money should be swept out, and to the credit of the Democrats 
there, they agreed. So that became the basis or one of the bases of 
this piece of legislation that we have been working on, and it achieves 
Republicans' first goal.
  The second goal is to end the programs as the statute intended. As I 
say, I believe the statute achieves that, but there is a very 
aggressive interpretation to the contrary. We know that Senator Schumer 
wanted to extend these programs well beyond the end of the year. We 
know it from his letter that he wrote. But, to his credit, he 
ultimately relented, and Republicans achieved our second goal.
  The third goal that we had was to make sure that these programs 
aren't simply resuscitated next year. We all know there is going to be 
a new Secretary of the Treasury, and a joint decision by the Treasury 
Secretary and the Fed is what governs this program. Now, I don't think 
they would have the legal authority to resume this, but many of our 
Democratic colleagues openly advocated that despite the fact that 
Secretary Mnuchin and Powell had agreed not to extend these programs, 
that a new Treasury Secretary should, in fact, resume these programs, 
start them up again. We said no, and again, to the credit of our 
Democratic colleagues, they relented, and Republicans achieved our 
third goal.
  The fourth was simply to forbid the creation of a clone that would 
circumvent the third; right? If you had to end a particular lending 
facility, but you could just create an identical version of it or a 
nearly identical version of it and call it something else, why, that 
would defeat the purpose of ending the one you ended. So we needed, in 
statute, to make it clear that there would be a prohibition against the 
creation of a clone or a near clone.
  This one, Senator Schumer fought us hard on. I will say he fought us 
hard on this. In the course of exchanges, we kept getting documents 
that didn't have any reference to this at all, but in the end, he 
agreed that we would have this prohibition.
  We then went back and forth on the exact language, exactly what would 
constitute a clone, as I am using the term, and what wouldn't. We got 
to an agreement, and we achieved our fourth goal.
  I want to commend my Democratic colleagues for working with us to get 
here. It wasn't easy, and I know there is a lot in this that they don't 
love about this, but with respect to these really important goals for 
the American people, we are making progress.
  One of the other things that I just have to address because the 
leader brought this up in his comments earlier was a terrible 
misrepresentation of what our objective was or why did we think it was 
so important to end these programs in the first place.
  Our intent was not, as Senator Schumer implied on the floor today, to 
sabotage the incoming administration's ability to stabilize the 
economy. And that is a direct quote. That was not our intent. So what 
was our intent? Well, first, I mentioned earlier we think it is 
important that you follow the law, and we believe the law requires that 
these be shut down. We understand there was going to be an aggressive 
attempt to circumvent that by interpreting the law differently, so we 
felt, clarify the statute, make it unambiguous, and we would achieve 
that.
  The second thing is, of course, it is completely consistent with 
congressional intent. Let me say that I was one of the two Republican 
Senators in the room when we were negotiating this part of the CARES 
Act with our Democratic counterparts, Secretary Mnuchin, our respective 
staffs, and attorneys. There was nobody in the room who thought for a 
minute that these were meant to be indefinite programs.
  Remember where we were. We were absolutely convinced--and I think 
rightly--that we were on the verge of a full-blown financial crisis, a 
meltdown in the financial markets. If that had happened, it is very 
likely we would have had a full-blown depression that could have lasted 
a very, very long time. Credit markets were freezing. Companies 
couldn't borrow. Do you know what that means when that happens to a 
business? They can't make payroll. If they can't access credit, if they 
can't borrow, draw down on a bank facility or issue their commercial 
paper or issue their corporate bond, if they can't raise the credit 
they need, they can't pay their bills. When the credit markets freeze 
up and businesses can't pay their bills, including payroll, you have a 
full-blown, unmitigated disaster. That is what we wanted to prevent.

  The purpose of these facilities was narrow. It was to restore the 
normal functioning of the private lending and capital markets of 
America. The purpose was never to replace those markets. The purpose 
was never to pick winners and losers and decide which companies and 
industries should get favorable terms and which should not. It was none 
of those things. And it was very much not intended to be some kind of 
all-purpose cure-all for whatever economic ills there are. None of 
that. The purpose was always to ensure that creditworthy borrowers 
could access credit through normal channels.
  Well, guess what. It worked. It worked better than we could have 
imagined, better than I was even hoping, because within days--within 
days--credit markets were flowing again because lenders had the 
confidence that, through these facilities, the markets would not 
collapse, there would not be a freezing up, they would be able to 
function, and therefore they had the confidence to make that loan to 
that company that needed to make its payroll and all the other 
innumerable transactions that have to take place.
  In fact, it worked so well that as of now, I think, total credit has 
flown at an alltime record pace in the United States of America. 
Corporate bond issuance is off the charts. High credit, lower credit, 
debt and equity--the capital markets have been flowing. Credit lines 
from banks have been flowing. The programs achieved their limited 
purpose extremely well.
  Now, look, are there other economic needs in America? Absolutely. I 
mean, there are industries that have been devastated--the restaurant 
industry, hotels, transportation. We know that,

[[Page S7862]]

and we have legislation that is attempting to address many of those 
issues with forgivable loans and an increase in unemployment benefits 
and other provisions. It is here on the Senate floor, through 
legislation like that, that we should decide how, whether, and to what 
extent we are going to address those problems. That is our job--to do 
it through an appropriation process here in the Senate. That is not the 
job of the Fed.
  That brings me to another really important reason why we didn't want 
these programs to continue indefinitely, and that is to protect the Fed 
from being politicized, to preserve the independence of the Fed, which 
is very, very important.
  If the Fed ever became simply an extension of one of the political 
parties, we would be in a very, very bad place. But think about it. If 
these programs were going to continue indefinitely and our Democratic 
colleagues got their wish that is represented in the Heroes Act--to 
have massive subsidies for municipalities--think about the amount of 
political pressure on the Fed to bail out whoever is the preferred 
constituent of the day: private or public, municipal or business.
  Just think about how it would be used, and think about the strings 
that they would--they have advocated this. Many of our Democratic 
colleagues have said: This could be a way to encourage unionization or 
encourage the composition of the Board to look like we would like it to 
look.
  It is an endless list, and it is all wildly inappropriate for the 
central bank of America to be engaged in this kind of thing. You should 
never put the Fed in the position of the incredible political pressure 
that they would have been under.
  So with this bill--and I hope we are able to vote on this, if not 
today then tomorrow. There are some things in this bill--unrelated 
things--that I like. I do think we need another round of PPP loans. I 
do think we need the expanded eligibility for unemployment benefits, 
for instance. Here are things I don't like. I think direct payments to 
people who have not suffered a loss of income makes no sense 
whatsoever. But this topic I have been discussing--the end of these 
13(3) lending facilities is a very important part of the bill that I 
like very much.
  There are four important objectives we set out, and we achieved them: 
sweeping the money out; shutting down existing facilities, the four 
existing CARES-funded facilities; forbidding their reopening without 
the consent of Congress; and forbidding clones from being an end-run 
around that--all without impinging on the Fed's ability to intervene in 
the markets in emergency circumstances. Those were our objectives. In 
this legislation, we achieve all four of those objectives. I would say 
that is a good day's work.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Arkansas.
  Mr. COTTON. Mr. President, I want to commend Senator Toomey and thank 
him for his expertise, for his foresight, and for his courage on the 
issue of ending these CARES Act-funded Federal Reserve programs.
  You have probably seen that over the last few days, he has been 
subjected to an onslaught of vicious, dishonest attacks by Democrats 
and their stenographers in the Press Gallery, saying that he was 
somehow gumming up the works, that we were not going to pass this bill 
because the Toomey language was stopping it. Nothing could be further 
from the truth.
  First off, while Senator Toomey may be our thought leader on this 
issue, this was the Senate Republican conference's position. That is 
why our majority leader stood firm behind it.
  Second, as Senator Toomey said, this is not a new issue; this is not 
something we just started debating. We had versions of this in our bill 
this summer. As he laid out, the minority leader and the Speaker of the 
House had a version of it in their $3.4 trillion this summer as well. 
The minority leader sent a letter about it. This has been at the heart 
of this legislation's debate for months. And the fact that it was in 
their legislation, it was in their letter--they kept saying that we 
wanted to somehow sabotage the economic recovery--just goes to show you 
what their intents were with these programs. It was to use them, as 
Senator Toomey said, as political slush funds; use them to bail out--I 
don't know--New York State or the city of New York; use them to impose 
politically correct policies on companies that could come to the Fed 
and get low- or no-interest-rate loans if they danced to the woke 
left's tune.
  Senator Toomey and Senate Republicans drew the line on this. We drew 
the line on politicizing the Fed. We had no intent whatsoever to harm 
the Fed's background ability to take emergency action, and we will be 
prepared in the future, as Congresses in the past have been, in an 
economic crisis to act as well, just like we have twice in the last 12 
years--2008 and 2020.
  But nothing you have read in the news about Senator Toomey and his 
language that he carried on behalf of the Senate Republican conference 
could be further from the truth. I want to thank him for standing 
strong, and I want to thank the majority leader for standing strong on 
this as well.
  I yield the floor.
  The PRESIDING OFFICER. The majority leader.